Commonwealth Numbered Regulations - Explanatory Statements

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TAXATION ADMINISTRATION AMENDMENT REGULATIONS 2008 (NO. 1) (SLI NO 135 OF 2008)

EXPLANATORY STATEMENT Select Legislative Instrument 2008 No. 135

 

Issued by authority of the Treasurer

Taxation Administration Act 1953

Taxation Administration Amendment Regulations 2008 (No. 1)

Section 18 of the Taxation Administration Act 1953 provides that the Governor‑General may make regulations, not inconsistent with the Act, prescribing all matters which by this Act are required or permitted by the Act to be prescribed, or which are necessary or convenient to be prescribed for giving effect to the Act.

The purpose of the Regulations is to amend the Taxation Administration Regulations 1976 to deliver half of the benefit of the low income tax offset to eligible individuals through their regular pay throughout the year, from 1 July 2008.

Certain taxpayers are entitled to a low income tax offset where their taxable income is below a certain level. Currently, the low income tax offset is delivered to eligible individuals upon assessment of their income tax return. From 1 July 2008, 50 per cent of the low income tax offset will be taken into account in determining withholding for eligible individuals, with the remainder of the offset entitlement to be paid upon assessment of their income tax return.

The low income tax offset for 2007-08 is $750 but pending the passage of the Tax Laws Amendment (Personal Income Tax Reduction) Bill 2008, it will increase to $1,200 from 1 July 2008, $1,350 from 1 July 2009 and $1,500 from 1 July 2010.

The maximum tax offset begins to phase out at four cents per dollar where the taxpayer’s taxable income is over $30,000. To ensure that all taxpayers who are entitled to the offset receive half of their entitlement through withholding, the portion of the low income tax offset to be delivered through withholding will phase out at two cents per dollar for income over $30,000.

The Regulations have inserted a reference to 50 per cent of the low income tax offset located in section 159N of the Income Tax Assessment Act 1936 in regulation 24 of the Principal Regulations. This allows the low income tax offset to be a prescribed tax offset for the purposes of paragraph 15-30(d) of Schedule 1 to the Act.

Consultation was not undertaken in relation to this instrument because it is minor or machinery of government in nature and does not substantially change the law.

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

The Regulations commence on 1 July 2008.Delete RIS if not required


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